Hoxton Park Residents' Action Group Inc. v Liverpool City Council [2010] NSWSC 1312 - FREEMAN DELUSION: The Organised Pseudolegal Commercial Argument in Australia

Hoxton Park Residents’ Action Group Inc. v Liverpool City Council [2010] NSWSC 1312 concerned a development approval given by the Liverpool City Council (the first defendant), to the Malek Fahd Islamic School Ltd, (the second defendant). The third defendant was the Australian Federation of Islamic Councils Inc., which owned the land in question, the fourth defendant was the State of New South Wales, and the fifth defendant the Commonwealth of Australia.

The plaintiffs, the Hoxton Park Residents’ Action Group Inc. were opposed to the development approval, raising a proposed constitutional argument in submissions. Section 116 of the Constitution looms large in the plaintiffs’ case, who argued that by providing for funding to the School or similar schools, the Commonwealth legislation offends the establishment provision, the imposition provision and the free exercise provision, to which the court provided a detailed analysis of each limb of section 116, referring to the relevant High Court decisions.

The plaintiffs raised arguments regarding local government, including that the New South Wales Parliament had no power to legislate for the creation or recognition of local councils, contending that the Constitution does not provide for local councils, that the failed referendum in 1988 was relevant to construing the constitutional validity of local councils, and that sections 106, 107 and 128 of the Constitution preclude the existence of a new tier of government. The court responded:

“So far as (1) is concerned, it is true that the Constitution says nothing about local councils. It follows that if local councils have a legitimate legislative basis, it does not come from the Constitution. This links to (2), because if there is a legislative basis for local councils, the fact that the referendum rejected the proposal is irrelevant. The failure of the referendum to include a reference to local government in the Constitution has been held to be irrelevant to the legitimacy of the existence of local councils by the New South Wales Court of Criminal Appeal in R v Vorhauer [2002] NSWCCA 483 at [14] per Spigelman CJ (with whom Sully and Kirby JJ agreed) and Vorhauer v R [2007] NSWCCA 125 at [41] per McClellan CJ at CL (with whom Hulme and Rothman JJ agreed); see also Glew v Shire of Greenough [2006] WASCA 260 at [24] per Wheeler JA (with whom Pullin and Buss JJA agreed). If there is no legislative foundation at a state level for local councils, then the result of the referendum will not be needed to attack their existence.
66 So far as ss 106 and 107 of the Constitution are concerned, they are of no assistance to the plaintiffs’ argument. Those sections provide that state constitutions continue subject to the Constitution and that the powers of the state parliaments continue unless they are expressly vested in the Commonwealth by the Constitution. Since local councils and the power to create local councils have not been made the exclusive preserve (or even a preserve at all) of the Commonwealth, whatever power the New South Wales legislature has to create local councils and legislate in respect of them remains unaffected: see R v Phillips (1970) 125 CLR 93 at 116 per Windeyer J (approved in Gerhardy v Brown (1985) 159 CLR 70 at 120-121 per Brennan J (as his Honour then was) and R v Fukusato [2003] 1 Qd R 272 at 296 per McMurdo P):
“[s 108] is significant as it and ss. 107 and 109 together state the result of the distribution of legislative powers, exclusive and concurrent, between the Commonwealth and the States. Section 107 preserves the legislative competence of State Parliaments in respect of any topic that is not exclusively vested in the Parliament of the Commonwealth or withdrawn from the Parliament of the State. This is simply an expression of an element that is implicit in any federal system in which defined powers are granted to the central authority and the undefined residue remains with the constituent provinces. Section 107 confirms that as the underlying principle of Australian federalism.”
So far as s 128 of the Constitution is concerned, this provides that the Constitution can only be amended by a referendum. The plaintiffs asserted that legislation creating or recognising local councils alters the Constitution. The only argument advanced in support of this was based on the fallacy that because the Constitution makes no reference to local councils, there is no scope for local councils in Australia, which ignores the express reservation of powers in the states to enact legislation.”

Another argument centered around the fact that s 220(1) of the Local Government Act speaks of a council as a “body politic” and not a “body corporate”, arguing that councils are a form of decision-making political institution not recognised by the State Constitution and not permitted to be created. The court responded:

The change from “body corporate” to “body politic” was explained in P Stein, P Ryan, L Taylor and B J Preston, Local Government Planning and Environment: New South Wales (looseleaf service), LexisNexis Butterworths, Sydney at [405,015]:
“Until 20 November 2008 a council was a “body corporate” under s 202 of the LG Act as it then was and a “statutory corporation” (s 50 of the Interpretation Act 1987 (NSW)). However, by virtue of the Local Government Amendment (Legal Status) Act 2008, which commenced operation on 20 November 2008, a council became under s 220(1) a “body politic of the State with perpetual succession and the legal capacity and powers of an individual both in and outside the State”. The Hon. Tony Kelly in his Second Reading Speech explained that the purpose of the legislation was “to remove the possibility that a council might be characterised as a constitutional corporation and therefore an employer for the purposes of the Commonwealth’s Workplace Relations Act. It will ensure that a council cannot be subject to a Federal industrial relations legislation.”
I do not think that the New South Wales Parliament was precluded from altering the status of councils from “bodies corporate” to “bodies politic”, but if, contrary to my view, it was, the consequence would be that that provision would be struck down, not the existence of local councils. Local councils have long been elected bodies: see, for a brief description of the history of local government law in New South Wales, L Pearson, Local Government Law in New South Wales (1994), The Federation Press, Sydney at pages 1-3.”

The court concluded that none of the claims brought by the plaintiffs were tenable and the proceedings were dismissed.

Download

In Hoxton Park Residents Action Group Inc v Liverpool City Council (No 2) [2011] NSWCA 363 the decision was appealed, mostly without success, and although leave to appeal and liberty to replead was granted on grounds limited to the challenges to the constitutional validity of the Commonwealth legislation providing for funding, and the claims in nuisance and negligence, the rest of the pleadings were struck out and leave to appeal refused.

Download